Largest BlackBerry Shareholder Fairfax Holdings Considers Buyout – Report

Struggling BlackBerry’s biggest shareholder has reportedly made a number of approaches to large Canadian investment funds to investigate the possibility of a buyout.

Fairfax Holdings has a ten percent stake in BlackBerry, which announced last month it was considering putting itself up for sale as it investigated the company’s future options.

A committee has been set up to discuss these alternatives, but Fairfax CEO Prem Watsa left the BlackBerry board to avoid any possible conflict of interest.

BlackBerry sale

Reports state that any deal is still a long way off but there was another party also investigating a takeover. Any deal would likely have to involve one of Canada’s pension funds keen on rescuing a famous Canadian company but the risk of such a takeover could put them off.

In any case, Fairfax’s alleged interest has improved BlackBerry’s share price and the firm is now valued at $6 billion. It had been suggested that BlackBerry’s patent catalogue alone could be worth as much as $5 billion if it was sold to one party.

However the recent trend towards consortiums purchasing patent catalogues could potentially bring the price down to between $2 billion and $3 billion.

Valuing the company

The patents are widely viewed to be BlackBerry’s most valuable asset, although some observers suggest its admittedly shrinking subscriber base could still be attractive to suitors. BlackBerry has 72 million subscribers, of which 20 million are believed to be enterprise or corporate.

Also in BlackBerry’s favour is that it owns most of its facilities and has already spent a significant amount of money on restructuring and redundancies. However some analysts see next to no value in the flagging handset businesses and even estimate it would cost close to $2 billion to shut down.

BlackBerry was once widely considered the market leader in enterprise smartphones, but has seen its share eroded by the likes of Apple and Samsung devices which can offer many of the same security and administration features. Its hopes of a recovery rested on a successful launch of smartphones running the BlackBerry 10 operating system, but this has failed to revive its fortunes so far.

Last week, Microsoft acquired Nokia’s mobile phones business for $7.2 billion (£4.6bn).

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